Imported coal to increase power tariff in Maharashtra

Coal News - Published on Tue, 11 Dec 2018

Times of India reported that the failure of Western Coalfields Limited (WCL) and other coal companies to supply contracted quantity of coal to Mahagenco is going to cost state’s power consumers dearly. Mahagenco is importing one-third of its coal requirement which will increase its generation cost. This will be recovered from citizens by way of higher tariff by MSEDCL. Mahagenco’s seven power stations need about 60 lakh ton coal every year. Due to acute shortage, the company has decided to import 20 lakh tonne. It will put an extra burden of INR 700 crore on the company.

A source in Mahagenco said that since last six months, coal companies were not supplying contracted quantity of coal. He said that “Only 57% of coal was supplied leading to a shortage of 43%. We were forced to reduce our generation.”

CIL officials told Mahagenco that they will supply only between 36 to 38 lakh tonne against the contracted quantity of 60 lakh tonne next year. With Lok Sabha elections round the corner, the state government does not want do load shedding. Therefore, it has decided to import 20 lakh tonne coal. The cost of domestic coal costs Rs3,500 per tonne on an average while imported coal costs Rs7,000 per tonne. This means that Mahagenco will have to spend INR 1,400 crore on importing coal. This is Rs700 crore more than the cost of domestic coal.